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Allahabad High Court
Jugal Kishore And Ors. vs Ram Narain And Ors. on 18 January, 1912
Equivalent citations: (1912) ILR 34 All 268
Author: Chamier
Bench: K Husain, Chamier


Chamier, J.

1. This was a suit for a decree for sale upon a mortgage, dated the 8th of January, 1884, made by Adhar Singh and others, in favour of the respondents. On the 17th and 18th of January, 1898, the mortgagors by two deeds sold the mortgaged property to the respondents for an ostensible consideration of Rs. 1,800, of which Rs. 500 were said to have been retained by the respondents on account of a mortgage of January 11th, 1894. There was no mortgage of that date–the intention was to refer to the mortgage of the 8th of January, 1884. The mistake in the day of the month seems to have been due to the fact that the mortgage of the 8th of January, 1884, was registered on the 11th of January, and the mistake in the year seems to have been a purely clerical error. In 1899, the appellants brought a suit for pre-emption saying that there was no Buch mortgage as the one referred to in the sale deed, and that the statement in the deed that Rs. 600 had been retained on account of a previous mortgage had been made for the purpose of making it appear that the consideration was larger than it really was. The respondents produced two witnesses, who swore that there was a previous mortgage, of the date given in the sale deed. That evidence was disbelieved, and at the last moment the respondents produced a copy of the mortgage of the 8th of January, 1884, and said that a mistake had been made in the sale deed, and the sum of Es. 500 had been retained on account of that mortgage.’ That explanation was rejected and a decree was made for preemption on payment of Rs. 1,300. The respondents appealed on another point, saying in their grounds of appeal that they would enforce their rights under the previous mortgage by a separate suit. They brought the present suit in July, 1909. The defence of the appellants was, and is, that if there was any mortgage in existence in favour of the respondents when they (the respondents) bought the property in 1898, it must be taken to have then ceased to exist according to the rule contained in Section 101 of the Transfer of Property Act. The respondents contend that the mortgage must be deemed to have continued to subsist, as the continuance of it was for their benefit. The rule contained in Section 101 of the Transfer of Property Act reproduces a rule well know a to English Courts of Equity, with reference to which many cases are to be found in the English and Indian Reports. Upon the authorities it is quite clear that in considering the question whether an incumbrance should be deemed to continue to subsist on the ground that the continuance of it was for the benefit of the person who has acquired the property the point of time to be regarded is the date of the acquisition of the property. One of the latest English cases in which the rule was considered is that of the Liquidation Estates Purchase Go. v. Willoughby [1898] A.C. 321. In his judgment in that case the Master of the Bolls said:–“We take it to be clear that if an intention to keep alive a charge on property is inconsistent with the real intention of the parties to the deed by which the purchaser of the property takes an assignment of it, that charge cannot be treated as still subsisting simply because the purchaser afterwards finds that it would have been better for him to have kept the charge alive.” The decision of the Court of Appeal was reversed by the House of Lords on the facts, but the correctness of the statement of the law contained in the judgment of the Master of the Soils was not challenged. In fact, at page 339 of the report, Lord Macnaghten quotes the following passage from his Judgment with approval :–” The answer to this question depends upon the intention of the parties at the time and that intention mast be found from the terms of the deed and the circumstances under which it was executed”. It was contended by Mr. Gokul Prasad that at the time of the sale deeds it was for the benefit of the purchasers that the mortgage should continue to subsist in view of the probability or possibility of a claim for pre-emption being preferred. But I do not understand how a mortgage on the property could defeat a claim for pre-emption. A pre-emptor must pay the price, actually and in good faith paid for the properly by the purchaser, however the price may be made up. The mortgage money was overdue, therefore any person obtaining the property by preemption could pay it oft’, whether the mortgagees consented or not. There might have been some ground for the argument if the mortgage had been with possession for a long term of years as in Bimdeshuri Singh v. Pandit Balrctj Sahai (1908) 10 Oudh Cases 49 but even in such a case, I think, it should be held that the continuance of the mortgage was not for the benefit of the purchaser. In the present case, in the view which I take of the law, there seems to be no ground whatever for holding that the continuance of the mortgage was for the benefit of the respondents, The fact that it would now be convenient for the respondents to be able to set up the mortgage has no bearing on the question. See Mahesh Lal v. Bawan Das (1883) I.L.R. 9 Calc. 961. The respondents have themselves to thank for what has happened. They accepted a deed of sale containing incorrect particulars of a previous mortgage and they followed this up by producing absurd evidence in the pre-emption suit. We were asked to hold that the appellants were estopped by their conduct in the pre-emption suit from denying the continued existence of the mortgage, but it seems to be impossible to do that. The appellants were not parties to either the mortgage or the sale. It is not shown that they knew anything about the mortgage. The respondents set up a mortgage in order to prove that the price was Rs. 1,800 and failed to prove it, with the result that the Appellants obtained the property free from incumbrances for Rs. 1,300. That was the fault of the respondents. The mortgage was non-exisfisnt at the date of the pre-emption suit, and it cannot be revived in order to remedy the error of the court or a party in\he pre-emption suit.

2. In my opinion, the respondents have no right to sue the appellants upon the mortgage of 1884, and their suit should have been dismissed.

3. I would allow this appeal and dismiss the respondent’s suit with costs in all three courts.

Karamat Husain, J.

4. I agree with my learned colleague in the order proposed by him.

5. The order of the Court is that the appeal be allowed and the respondents’ suit be dismissed with costs in all courts.

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